Home > Uncategorized > Deciphering the usefulness of advice

Deciphering the usefulness of advice

InvestFair is just over and my friends are excited over their trip to MBS. I was there 2 years ago and find it quite entertaining though the sales pitch is overbearing. Of cos everyone is excited about what Jim Roger is going to say about the upcoming months in stock market. Of cos not only for Jim speech, there are traders alike investors waiting to get the latest insight from other speaker.

Copied from my friend:

To be a super-trader, you’ll need an edge to overcome the laws of probability and the uncertainty of the marketplace. That edge comes from information flow, the ability to correct your habits in terms of the market’s characteristics, and being able to take risks, cut losses, expand your information network, ferret out… ideas, and take recommendations.

Looking at this passage, any normal people will feel this is it, I’m sure to make money but only those in the market long enough will understand this is a lot of principles but the usefulness is close to zero. As there are not enough details on how to make use of these principles. And after much questioning, my dear friend finally come up with:

Copied from another of out friend:

TA – look for supports. FA – determine valuation and buy with a reasonable margin of safety. and, don’t load everything…

But again, must look at the company prospects and the type of business it has (whether recession-proof or not) and how… the macroeconomic can also affect its business…

I wouldn’t say its not wrong but a counter got so many support, which one to choose to enter? How much is a reasonable margin of safety? How to determine company prospect and the macroeconomic factors?

If you want to talk about valuation, Genting is the most freaking expensive casino stock in the world but still it can go even higher while China Gaoxian has a earnings similar to Hyflux, Gaoxian still stuck at PE of less than 5. Does it make sense?

The issue I want to bring forward is a plan must be specific else even if the stars are all aligned together, there is a chance you won’t be able to execute due to fear.

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